Uber ATG gets $1B to accelerate toward self-driving car production

Yesterday, Toyota Motor Corp., DENSO Corp., and the SoftBank Vision Fund announced a $1 billion investment in Uber Technology Inc.’s Advanced Technologies Group, which is developing self-driving vehicles. The companies are expanding on existing partnerships in the new Uber ATG entity, which is maneuvering in a crowded and well-funded field.

Spending to scale up

The investment is intended to help Uber ATG further develop self-driving hardware and software and to scale up for production. Currently, the cost of sensors, compute, and connected vehicle systems is as much of a speed bump as is the perceived safety and reliability of driverless vehicles. The partners said they hope to hasten adoption of automated ride-sharing services.

“Among the biggest challenges facing automated driving, most lie in how to implement both the hardware and the software at scale,” stated Hiroyuki Wakabayashi, executive vice president of Japan-based DENSO.

Last August, Toyota invested $500 million with the goal of piloting Uber’s self-driving technology and Toyota’s Guardian safety system in Toyota Sienna vehicles in Uber’s ride-sharing network in 2021. Toyota said it will contribute up to $300 million more in the next three years toward design and bringing autonomous vehicles to market.

“Leveraging the strengths of Uber ATG’s autonomous vehicle technology and service network and the Toyota Group’s vehicle control system technology, mass-production capability, and advanced safety support systems, such as Toyota Guardian, will enable us to commercialize safer, lower-cost automated ride-sharing vehicles and services,” said Shigeki Tomoyama, Toyota executive vice president and president of Toyota’s Connected Company.

Toyota and DENSO said they will invest $667 million, and SoftBank will invest $333 million. Uber ATG is valued at $7.25 billion.

Industry observers had speculated for weeks about the deal, especially after ride-sharing rival Lyft Inc.’s $2.3 billion initial public offering last month. While Lyft is dealing with investor lawsuits claiming that its stock was overvalued, Uber has accelerated its self-driving efforts after some uncertainty, as described by The New York Times.

Funding keeps flowing to self-driving cars

The investment in Uber ATG is just the latest major transaction around autonomous vehicles. Much of the investments have gone into component technologies, such as processors, lidar, and software, all of which could benefit other areas of robotics.

In addition, Uber ATG partners Toyota and automotive supplier DENSO contributed $15 million to connected vehicle company Airbiquity. Uber has made a version of its Autonomous Visualization System open source to encourage development of data sharing.

In February, autonomous delivery startup Nuro.ai raised $940 million from investors including SoftBank. Aurora Innovation Inc. raised $530 million in Series B funding from parties including Amazon.com Inc. in a veritable wave of autonomous funding.

As part of a self-regulatory effort, Ford Motor Co., GM, and Toyota recently founded the Automated Vehicle Safety Consortium with SAE International to create testing and safety guidelines for self-driving cars. Autonomous cars are coming, but they’re still years away, said Raquel Urtasun, a researcher at Uber ATG. Uber this week also made safety recommendations for its ride-sharing passengers.

In the meantime, many of the investments mentioned above have been in delivery and fleet vehicles such as trucks, taxicabs, and ride-sharing vehicles, where economies of scale can mitigate the development costs. In the case of autonomous shuttle buses, more controlled environments are easier and safer to navigate.

The global market for self-driving cars and trucks could experience a compound annual growth rate of 58.2% between 2017 and 2026, said Research and Markets.

Similarly, the Uber ATG investment is less of a gamble, since rolling out autonomous ride-sharing vehicles allows the automakers and technology providers to gather data without worrying about individual driver or owner privacy or liability. All the major carmakers are bracing themselves for changing consumer habits, just as the chipmakers are hoping for new sources of demand as computing and smartphone markets flatten or decline.

The race toward self-driving vehicles continues to be extremely competitive, and The Robot Reportwill continue to track transactions and advances.